Gold price today: MCX rates slip on profit booking after BoJ rate hike

The price of gold fell in the first trades on Friday, December 19, on the domestic futures market because the investors taking profits after the Bank of Japan (BoJ) interest rate decision. Moreover, softer than expected US inflation together with the strengthening of the dollar had also negative impacts on the prices of gold.

At around 9:10 am, gold futures for February delivery on the Multi Commodity Exchange(MCX) were down 0.56% at ₹1,33,772 per 10 grams. March silver futures also fell by 0.26% to ₹2,03,034 per kg.

This decline follows the 25-basis-point hike in the key policy rate by the Bank of Japan, which took it to 0.75%, the highest level since September 1995. Even though the move was largely expected, it has made traders of yen-carry more cautious and has had an impact on sentiment across global markets, including commodities.

In the international market, gold prices went down after the US inflation report presented a milder than expected picture. The Reuters reported that US consumer prices increased 2.7% year-on-year in November which was lower than the economists' forecast of a 3.1% increase. The weaker data has raised the prospects of future rate cuts but on the other hand, the rise of the dollar index by around 0.10% to one-week highs has also limited the price increase of gold.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, said gold was trading close to its October record high and remained on track for a second consecutive weekly gain. He noted that easing US inflation has strengthened expectations of rate cuts, while ongoing geopolitical tensions continue to lend underlying support to the metal.

“Geopolitical risks remain elevated, with developments such as the US halting sanctioned Venezuelan oil shipments and renewed territorial claims by Russia in Ukraine supporting gold prices,” Trivedi said. He further stated that the futures of MCX gold for February will most probably be in the vicinity of ₹1,34,000 to ₹1,35,000 per ten grams in the immediate future.

Rahul Kalantri, Vice President of Mehta Equities, has indicated that international gold is characterized by support at $4,275 and $4,245, while at the same time $4,355 and $4,385 will be the points where its upward movement is stopped. Silver moves similarly with support at $64.40 and $63.75, while $65.60 and $66.15 are identified as its resistance levels.

In the local currency Kalantri regards gold as being supported at ₹1,33,850 and ₹1,33,110, whereas the resistance level is set at ₹1,35,350 and ₹1,35,970. In the case of silver, support is set at ₹2,02,450 and ₹2,00,280, while the resistance level is defined as ₹2,05,810 and ₹2,07,270.

Market players are now monitoring closely signals from global central banks, currency fluctuations, and geopolitical happenings to obtain further indications on the price trend of the precious metals.